Investors encouraged to prioritise methane reduction as a critical measure to urgently curb global warming
12 December 2025: A new report commissioned by the First Sentier MUFG Sustainable Investment Institute, and in collaboration with Discern Sustainability, highlights methane as a significant but under-scrutinised contributor to global warming, and encourages investors to take action to help reduce methane emissions and curb global warming.
The report, titled Low-Hanging Plumes: An Investor’s guide to Methane, discusses the industries primarily responsible for methane emissions, outlines the gaps and opportunities that exist in regulation and governance, and highlights the role investors must play in reducing methane exposure globally.
Sudip Hazra, Director of the First Sentier MUFG Sustainable Investment Institute said: “Methane emissions are responsible for about one third of anthropogenic global warming and have greater short-term impacts than carbon dioxide. By reducing methane emissions, companies can help to slow down global warming, however, investors also have a role to play. By leveraging their influence through company engagements, product development and advocacy, investors can contribute to long-term sustainability outcomes while developing new revenue opportunities”.
The Report puts a spotlight on the sectors that are the largest contributors to anthropogenic methane emissions, which include:
- Agriculture (livestock, manure and rice cultivation) which accounts for 40% of methane production;
- Fossil fuels in oil and gas and coal mining which account for 23% and 12% of methane emissions respectively; and
- Waste (solid waste and water waste) which contributes to 20% of methane emissions, with solid waste in uncontrolled dumping being the largest cause.
It also highlights that supressing excess methane emissions through targeted methane programs can deliver near-term cooling effects within years.
Mr Hazra said, “While methane reduction solutions are available and cost efficient, little is being done to mitigate the risks in these industries due to limited data sources, poor regulatory pressure and misaligned incentives”.
“In addition, investors are predominantly focused on reducing CO2 emissions in their climate action while methane is overlooked in target setting, engagement activities and climate finance. Methane abatement finance constitutes approximately 1% of total global climate finance flows.”¹
To support discussions and drive positive change, the Report outlines sector specific actions that investors can explore to mitigate the impacts of methane emissions, including:
- Advocating for stronger regulation to create supportive policy environments such as methane taxes, cap-and-trade, and import standards;
- Encouraging better data reporting and transparency;
- Leveraging ownership and lending through shareholder influence;
- Setting conditions for methane reduction; and
- Supporting blended finance and transition loans to fund finance for methane reduction plans, particularly in emerging markets.
Mr Hazra concluded, “Human activities are now responsible for at least two-thirds of global methane emissions, meaning the need for companies and responsible investors to take action is greater than ever. Institutional investors now have an opportunity and an imperative to use their influence via engagement, alongside regulatory and government bodies, to increase awareness of methane emissions and in turn, drive positive change for long-term sustainability.”
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About First Sentier MUFG Sustainable Investment Institute
The First Sentier MUFG Sustainable Investment Institute is jointly supported by First Sentier Group and Mitsubishi UFJ Trust and Banking Corporation, a consolidated subsidiary of MUFG. The institute aims to help increase awareness and encourage action on important but under researched and emerging ESG-related issues. It will publish research on topics that can advance sustainable investing. An external academic advisory board informs the institute’s research agenda and ensures its publications meet high standards of rigour.
About First Sentier Group
First Sentier Group is a global asset management organisation that brings together affiliate investment teams to deliver meaningful investment outcomes for our clients. Today, across the First Sentier Group, we manage US$144.5 billion* in assets across global and regional equities, cash and fixed income, listed and direct infrastructure and listed property securities, and alternative credit.
We are home to distinct affiliate investment teams including AlbaCore Capital Group, First Sentier Investors, FSSA Investment Managers, Igneo Infrastructure Partners, RQI Investors, and Stewart Investors. All investment teams operate with discrete investment autonomy, according to their investment philosophies and based on responsible investment principles.
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